Power rates down in August—Meralco

The Manila Electric Co. (Meralco) announced on Monday a reduction in power rates this month mainly on the account of lower generation charge.

August power rates are down by P0.11 per kilowatt-hour (kWh) to P8.50 per kWh. This translates to a reduction of around P22 in their electricity bill for households with a monthly average consumption of 200 kWh.

The decrease in the overall rate is primarily due to the generation charge, which is P0.20 per kWh lower than last month’s. At P3.86 per kWh, it is also P0.69 per kWh lower compared to August 2015’s P4.55 per kWh. This month’s generation charge is the second lowest since October 2004.

Charges from the Wholesale Electricity Spot Market (WESM) decreased by P3.48 per kWh due to lower spot prices. There was only one instance of yellow alert for the July supply month, or on July 19, vis-à-vis five in June (June 13, 14, 17, 21 and 22). There was also no instance of red alert for both months. The share of WESM to Meralco’s total power requirements for the July supply month went up to 9.5 percent, from 7.8 percent the previous month.

Cost of power from the independent power producers (IPPs), meanwhile, increased by P0.16 per kWh. This was because of the lower dispatch of San Lorenzo and Santa Rita. Cost of power sourced from plants under the power- supply agreements (PSAs), on the other hand, was almost at the same level as last month, with only a slight increase of P0.002 per kWh. The share of PSAs and IPPs stood at 49.3 percent and 40.3 percent, respectively.

The lower generation charge more than offset an increase in the transmission charge of P0.08 per kWh, due to higher regulating reserve. Taxes and other charges also increased by a combined amount of around P0.01 per kWh.

Meralco’s distribution, supply and metering charges, meanwhile, have remained unchanged for 13 months, after they registered a reduction in July 2015. Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the National Grid Corp. of the Philippines.